Infrastructure is at the top of the agenda in the world of economic policy as officials try to rev up a nearly idling global growth engine.

But will it deliver the long-term growth gains that policymakers claim? History indicates not, according to a new working paper published by the International Monetary Fund.

The Group of 20 largest industrialized and developing nations are looking to infrastructure investment as a key plank in their plans to boost global gross domestic product by 2% over the coming half-decade. Read More »

A year and a half after Prime Minister Shinzo Abe launched his program to end Japan’s long slump, a number of economists are turning skeptical about prospects for success. One remaining optimist — albeit with some caveats — is Adam Posen, president of the Washington D.C.-based Peterson Institute for International Economics, and a long-time student of Japanese economics and finance. He also sits on the panel of economic advisers to the U.S. Congressional Budget Office and is a former member of the Bank of England’s monetary policy committee.

The Wall Street Journal sat down with Mr. Posen in Tokyo recently to get his assessment of how the “Abenomics” experiment is working.

The gist of Mr. Posen’s argument is that despite some short-term setbacks, there are plenty of positive signs Japan is on track to return to steady growth and end deflation. But progress will be slow and unsteady, in part because he believes Japan must balance its growth strategy with a plan to curb its debt. Read More »

Many Federal Reserve watchers expected Dallas Fed President Richard Fisher, a frequent critic of current Fed policy, to dissent against the central bank’s forward guidance at Wednesday’s meeting.

Instead, it was Charles Plosser of the Philadelphia Fed who took the stand. He thought the Fed’s commitment to keep rates near zero for a “considerable time” after the bond-buying program ends fails to recognize recent progress in the economy. Read More »

Bank of Japan officials are becoming less confident in their outlook on exports after having erred on the side of optimism for more than a year, setting the stage for fresh debate at their policy meeting next week.

The central bank’s assessment of exports warrants close attention, especially as Japanese households have been slow to open their wallets in the face of a higher tax burden. If exports stay listless or deteriorate further, forcing the central bank to admit the failure to revive threatens to derail its rosy outlook on growth and prices, the central bank could come under renewed pressure to add to its already massive stimulus measures. Read More »

The Federal Reserve’s various efforts at honing its low-rates message have been successful at keeping borrowing costs down by giving investors greater clarity about the likely path of policy, according to the International Monetary Fund.
However, the policy’s effectiveness has varied depending on the type of guidance used, the IMF study on the U.S. economy said, published this week as part of its global economic forecasts.
The Fed’s guidance has shifted quite a few times in recent years.
“Forward guidance has generally been effective in moving policy expectations in the intended direction and reducing policy uncertainty,” the IMF study says. Importantly, the authors argue the positive impact came from an impression in financial markets that the Fed was becoming more aggressive rather than more pessimistic. Read More »

The nation’s infrastructure is a key priority for President this week, as Congress debates whether, and for how long, to fund the Highway Trust Fund — the federal program that disburses gas taxes to states for road and mass transit construction projects. A construction project along Interstate 95 Getty Images Federal transportation officials have warned the fund could [...] Read More »

China’s latest trade data disappointed many economists, but it may offer hope that a long-running slowdown in Asian export growth has bottomed out.

China’s General Administration of Customs said Thursday that exports in June grew 7.2% compared with the same month of 2013, below a median forecast of 10% growth from a Wall Street Journal poll of 21 economists.

That rounded out yet another quarter of weak, single-digit export growth. After years of growing by more than 10% a year, exports grew 5% in the quarter compared to the year before. That’s the fifth straight quarter of single-digit expansion. Read More »

Arriving from Paris recently, Rintaro Tamaki couldn’t help but notice the difference in the public debate between Japan and Europe. The chief economist of the Organization for Economic Cooperation and Development observed that in Japan, the discussion is all about strengthening growth, while in Europe, it is about reducing inequality.

As a testament to this, the international best-seller on rising global inequality, “Capital in the Twenty-First Century,” by French economist Thomas Piketty, isn’t even available in Japanese. First published in French last year, the English-language version shot up the U.S. charts after it came out in the spring.

The lack of debate on inequality in Japan is especially significant in light of widening income gaps under Prime Minister Shinzo Abe’s policies to stoke inflation, said Mr. Tamaki, who is also deputy secretary-general of the OECD and a former of Japanese vice finance minister. Read More »

The recent hiring spurt—one of the best stretches since the late 1990s—has gotten a surprising lift by a major sector: government.

In June, all levels of government added a seasonally adjusted 26,000 employees. That gain outpaced the manufacturing and construction sectors — combined. Rising government employment not only adds to the total hiring figure, it also represents growth in a relatively well-paying field. Read More »

A senior Bank of England official Wednesday defended central banks against a charge they hear a lot these days: that their policies have stoked a flurry of financial risk-taking that will inevitably end in tears.

Andrew Haldane, the BOE’s chief economist, told a conference in London that reviving investors’ appetite for risk was one of the forgotten goals of crisis-fighting measures such as cutting interest rates to rock-bottom and buying safe assets such as government bonds, a policy known as quantitative easing Read More »

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